8-KLeadership Changes

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Executive Changes (Mar 18, 2009)

Filed March 18, 2009For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) filed an 8-K on March 18, 2009, detailing the adoption of a new Value Creation Plan (the "Plan"), effective March 12, 2009. This Plan supersedes the previous Restructuring Value Plan and is designed to incentivize executives during the company's ongoing Chapter 11 restructuring process. The Plan consists of two components: the Restructuring Value Program (RVP) and the Cash Incentive Program (CIP). The RVP aims to reward participants for their continued employment and contribution to a successful restructuring, with payouts contingent upon the company's emergence from Chapter 11 or specific conditions related to a joint restructuring plan. The CIP, on the other hand, provides annual performance-based bonuses for the three years following the company's emergence from restructuring, tied to achieving specified individual performance goals.

Key Highlights

  • 1Adoption of a new "Value Creation Plan" (the "Plan") replacing the previous Restructuring Value Plan.
  • 2The Plan includes two components: the Restructuring Value Program (RVP) and the Cash Incentive Program (CIP).
  • 3RVP awards incentivize participants for a successful restructuring and are payable upon emergence from Chapter 11 or upon specific events tied to a joint plan.
  • 4CIP provides annual performance-based incentives for the first three years post-restructuring emergence.
  • 5Both RVP and CIP awards can be accelerated upon specific events such as death, disability, termination for "good reason" or by the company without "cause", or a "change in control".
  • 6Target RVP awards for named executive officers range from $6 million (N. Smit) to $765,000 (E. Schmitz, G. Raclin).
  • 7Target annual CIP awards for named executive officers range from $2.5 million (N. Smit) to $597,000 (G. Raclin).

Frequently Asked Questions

The primary purpose of the Value Creation Plan is to incentivize and reward key employees, particularly named executive officers, for their continued service and contribution to the successful restructuring of Charter Communications, Inc. during its Chapter 11 proceedings and into the period following its emergence.

RVP payments are generally earned upon the company's emergence from its Chapter 11 restructuring proceeding. However, payments can also be triggered earlier under specific conditions, such as the payment of "Commitment Fees" under a "Joint Plan", or upon an earlier termination of employment due to death, disability, termination by the company other than for "cause", voluntary termination for "good reason", or a "change in control".

The CIP is designed to provide annual bonuses for performance over the three years following the company's emergence from Chapter 11. Unlike the RVP which is primarily tied to the restructuring event itself, the CIP is focused on achieving specified individual performance goals each year after emergence. Unearned amounts may be earned in subsequent years if those later-year goals are met.

Yes, both the RVP and CIP awards can be accelerated and paid out upon a "change in control" of the company, provided the participant is employed at the time of such event. This offers executive compensation protection in the event of a significant corporate transaction.